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Implementation of a community based power generation program Soorya Bala

Sangramaya ( Battle for Solar energy) to purchase electricity generated by the

electricity customers

1.0 Background

Generation of electricity through renewable energy sources has become a major concern for
government as well as private sector investors. If the present consumption level of electricity
in Sri Lanka 3,950 MW increases at a rate of 7% annually, it is needed to generate an
additional 3,000 MW capacity by the year 2025. Accordingly, Ceylon Electricity Board has
planned to generate a considerable amount of the new requirement of 3,000 MW through
renewable energy sources. Government policy is to increase the existing 50% of the
electricity generate through renewable energy sources to 60% by the year 2020 and to
increase it further up to 70% by the year 2030 and to generate the total energy requirement
through renewable and other indigenous energy resources by 2050. The expectation to make Sri
Lanka an energy self-sufficient nation has been pointed out in the Energy development plan
for 2015-2025 A country Enriched with Energy for a knowledge based economy

Plans have been already prepared to diversify the energy sector of Sri Lanka by building
more wind power plants, solar energy plants, and bio fuel plants. Accordingly, plans have
been formulated to build wind power plants of 600 MW and solar power plants of 3,000 MW
in the next ten years. The private sector has showed its special interest in generating
electricity through solar energy. However only about 1.5 MW had been added to the
Electricity grid through solar power up to now. In addition, about 30 MW is being received
through the net metering system generated by rooftop Solar Panels. When the national
electricity demand is concerned, that amount is insignificant.

According to the existing system, the time taken to get a license for solar and wind power
plants is extremely high and it is reported that there is a difficult for the proper investors to
get a license. Complains are there from the investors that these licenses are being reselling
through agents. Therefore the ministry has decided to provide the opportunity through a
competitive system with transparency. Meanwhile, the ministry has also planned to promote
small scale solar power plants using rooftop Solar Panels in customer housing units.

2.0 Soorya Bala Sangramaya (Battle for Solar energy) Program

The proposed Battle for Solar energy is a community based solar electricity generation
program introduced to integrate the solar electricity generated in houses/premises of
electricity customers through rooftop solar panels to the national grid. The project operates in
the following three manners. Any electricity customer can choose one option under
mentioned. The maximum installed capacity will be limited to the contract demand of that
particular customer. There will be a contract up to 20 years with the customers who join this

1. Existing Net Metering system: the customer generates electricity using solar panels fixed
on their houses/premises and connected to the grid through net metering system. The
consumer has to pay only for the net amount of electricity that he consumed. In this
system, if that particular customers production exceeds his consumption, he can bring
forward the balance and consume it in the months forthcoming. No fee will be paid for
the excess electricity produced. The customer will be given the choice of using the
balance electricity within 10 year period. (Net Metering)

2. If the generated units of electricity using the solar panels fixed on their houses/premises
are greater than the amount he consumed, the customer will be paid Rs.22.00 per unit
during the first 07 years and from the 8th year he will be paid Rs. 15.50 per unit. If the
consumption is greater than he generated, the consumer has to pay at the existing
electricity tariff for the excess electricity consumed. (Net Accounting).

3. Getting paid for the amount of electricity generated using the solar panels fixed on their
houses/premises. Unlike net metering method there is no linkage in-between the
electricity consumption of the customer and the electricity generation. The customer has
to pay for the electricity consumed according to the existing tariff. Electricity Board will
pay for the total amount of electricity he generates. (Net Plus).

The existing net metering system is favourable for any electricity customer who is
consuming more than 200 units per month. When considering the option 2 it is favourable for
customers who consume more than 120 units per month. The option 3 will be favourable for
any customer when analyzing the options. Hence it is practical to educate the customers
about all the three options and allow them to select the suitable option freely according to
their wish.

At present, many commercial banks in Sri Lanka are providing loan facilities to purchase net
metering systems. These loans are being given in the basis of paying back in 5-7 years and
75% of the total amount of installation will be provided under these schemes. If a long term
loan facility can be arranged under a concessionary interest rate all the above three options
can be implemented affordably and the ministry is taking steps to formulate such a scheme.

The net metering system that implemented in 2010 for small scale solar power generation
was not grew up as expected and it had become more popular among customers who had
high energy consumption. But studies reported that small solar power plants built on rooftops
are highly beneficial. Economical, environmental and social benefits can be specially
achieved through rooftop solar energy power plants as follows.

I. Small scale solar power plants on rooftops are important to the balance of the electricity
system as they are scattered throughout the island.
II. Since the generation occurs closer to the point of consumption, the transmission and
distribution losses are minimal.
III. Small scale entrepreneurs also can join the electricity production which has been
limited to the large scale power generation companies.
IV. When the customers of electricity have become the producers, their economy will be
V. Since the small scale electricity generation system is scattered across the island, it
positively affect the security of the electricity supply.
VI. As the sun light is freely available, the foreign exchange spend on fossil fuels will be
VII. Inequality of income distribution of the country will be reduced since a large number of
people are being able to get an additional income being producers of electricity.
VIII. Ability to add 200 MW to the grid by 2020 and add another 800 MW by 2025.
IX. Ability to reduce Carbon Dioxide (CO2) emission from thermal power plants to
1,50,000 MT
X. Every customer who joins this scheme is able to receive a monthly income about
Rs.300/= for the first 7 years after paying the bill and interest. Also Rs.2500/= monthly
from the 8th to 20th year.
XI. Ability to generate a large number of direct and indirect jobs with the awakening
occurred in this field.

Any electricity customer has to pay back the loan within the first 7 years after the initial
investment made for the purchase of solar panels to fix on the roof tops. Hence it is proposed
to pay a higher rate for a unit of electricity during the first 7 years. For the period 8-20 years,
it is proposed to purchase a unit at a price offering a reasonable benefit for the customer for
their investment. The proposed rate of payment is as follows.

Project period (Years) Payment per a unit of

Electricity (Rs)
Tier I 1-7 22.00/kWh

Tier II 8-20 15.50/kWh

(2.1 Chart)

If a customer fix a solar panel of 1kW on his rooftop, he will be able to generate about 115-
120 units of electricity per month. According to the proposed rate of payment, he would be
able to get an income about Rs.2500-2700/= monthly. If the customer had taken a loan
facility for this project, he has to pay about Rs. 2200/= monthly if the loan period is 07 years
and the interest rate is 13%. According to the proposed payment plan, the consumers will be
able to retain about Rs.300 per month after paying off loan instalment, interest, and the cost
of electricity consumption. If the loan scheme is more concessionary, the income level of the
customer will be increased.

After paying off the loan instalments in 07 years, they will be able to get about Rs.2500 -
2700/- monthly as a net income for a further period up to 20 years.

Considering all the benefits, the ministry has decided to introduce 1,000,000 Rooftop Solar
units during the next 10 years as a national program. The objective of this program is to
create electricity producers at least 20% from the total electricity customer base. At present,
the generation of solar power at domestic level is confined only among high income and
upper middle class people. The reason behind that is the non-payment for the excess
electricity customers feed to the network. Hence it is difficult to attract low income
electricity consumers for the existing scheme. The objective of the ministry is to introduce at
least 20% to low income families from the 1,000,000 solar power plants expected to be
installed under this program. Subsequently about 200,000 low income families will become
producers of electricity.

It is expected to produce 200 MW by the year 2020 from the proposed project and increase it
up to 1000 MW by the year 2025.

3.0 Proposals

I. To execute the programme of installing solar power plants on rooftops as a national

program under the leadership of Honourable President and the directions of Honourable
Prime Minister.

II. To introduce the following scheme to integrate all electricity customers including low
income families towards the program.
a. To continue the existing net metering system. No payment will be made for the
excess electricity produced. But the excess electricity can carry forward to use for
their consumption requirements in the future.
b. To make a payment for the electricity customers who produce excess electricity at a
rate of Rs.22/- per unit during the first 07 years and Rs.15.50 for the period of 8-15
c. Electricity producers using rooftop solar panels will be paid Rs.22/- per unit during
the first 07 years and Rs.15.50 per unit for the period 08-20 years. Unlike in the net
metering system, the electricity production and the consumption are independent.
Accordingly customers have to pay for their consumption according to the tariff of
that time and the electricity board will pay for the units of electricity produced under
the above tariff.

III. Setting up roof top power plants as much as possible on government buildings as a
government policy.

IV. Provision of the maximum cooperation for this program from all government